Top Ten online news stories for the quarter

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TOP 10

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IT’S BEEN ONE OF THE MOST TUMULTUOUS PERIODS IN AUSTRALIAN HOSPITALITY, WITH COVID-19 RESTRICTIONS DEVASTATING THE ON-PREMISE.

THESE WERE THE TOP 10 ARTICLES ON THE DRINKS TRADE WEBSITE BETWEEN SHUTDOWN ON MARCH 23 AND THE END OF MAY.

1. PERNOD RICARD LAUNCHES MEALS FOR MATES

Pernod Ricard announced an initiative called Meals for Mates in late March, pledging thousands of meals to hospitality workers impacted by the COVID-19.

Hundreds of thousands of staff across bars, pubs, cafes, restaurants and clubs across Australia either lost their jobs or were struggling to cope with reduced hours, with many small venues and businesses forced to close their doors from recently introduced measures to slow the spread of the virus.

Recognising many small businesses, despite the current economic conditions, were still open with a takeaway or delivery option, Pernod Ricard made $25 vouchers available to impacted hospitality staff across Victoria, NSW and Queensland.

More than 4000 vouchers have been provided to date.

2. BAR STAFF ABUSED OVER COVID-19 OUTBREAK

Staff at Eaglemont Cellars and Wine Bar in Melbourne were abused in March after being linked to a COVID-19 outbreak.

The venue hosted a birthday party on March 14, with the bar owner noting that “a significant number” of guests had travelled from overseas, mainly the UK, to attend the function — which was held before the mandatory two-week isolation for overseas travellers was enforced.

The owner and other staff members began exhibiting coronavirus symptoms around March 21. On March 25 they were notified that a guest had been diagnosed with COVID-19, so a number of staff got tested.

At least five staff tested positive and the venue was subjected to abuse online regarding the outbreak.

“We are sad and disappointed at the defamatory remarks that have come through our social media particularly when we have all been so ill,” the owner said on Facebook. “We have trusted in the Department of Health process with regards to dealing with the pandemic.

“We will continue to convalesce and would ask for some consideration during this time. We will advise of our new open date and naturally our premises have been sanitised as a precaution and in accordance with Department of Health regulations. Be kind, be safe, be well.”

3. LION LAUNCHES XXXX DRY IN QUEENSLAND

XXXX released a new easy drinking full strength lager, XXXX DRY, in Queensland and the Northern Territory in March.

The beer was launched on tap in selected venues, with 330ml bottles to follow from April 20. The brand has no plans at this stage to take the beer south.

Tully Hadley, Head Brewer at the XXXX Castlemaine Perkins Brewery said: “XXXX DRY is brewed here at Milton using many of the same quality ingredients as the rest of the XXXX family, such as premium Australian barley, malted locally in Queensland.

“We want to give XXXX DRY a crisp finish, so we’ve used Nelson Sauvin hops, which gives a slight aroma and makes the beer incredibly refreshing for those hot Queensland days.”

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4. CUSTOMERS SWITCH TO MAINSTREAM BRANDS DURING COVID-19

ALM reported in early April that it had seen a shift away from premiumisation to more mainstream alcohol brands in its off-premise channels during COVID-19.

CEO Chris Baddock noted that while there are early signs of change in consumer buying habits, it was too early to assume they would continue.

“However, we have seen a softening of premiumisation and a move to mainstream beer and more affordable products,” he said. “Consumers are exhibiting a narrower repertoire and less willingness to shop new brands/SKU’s and categories.”

Baddock’s insights reflected those revealed by Shopper Intelligence data, which found one of the four key behaviours in the grocery sector during COVID-19 had been shoppers being less willing to spend on premium options.

“The loss of jobs and continued uncertainty is currently outweighing consumer ability or desire to spend more on premium ranges,” Shopper Intelligence Managing Director Simon Ford said. “Brands should focus on value and their mid-tier ranges to meet this shift.”

5. ANGUS MCPHERSON APPOINTED DIAGEO AUSTRALIA MD

Angus McPherson was appointed Managing Director of Diageo Australia in April.

“I’m delighted to welcome Angus to Diageo,” Diageo’s President Greater China and Asia, Sam Fischer, said. “He has many years of international experience working in the beverage alcohol industry. He will bring deep sales and marketing experience and performance delivery discipline, and drive outstanding relationships with the team, customers and industry in this exciting market.

“Over the past eight years, he’s held various Managing Director roles at Treasury Wine Estates, with increasing scale and complexity.

“He led the transformation of TWE’s Australia and New Zealand business, where he and his cross-functional team grew flagship wine brands and successfully launched a number of disruptive innovations in the market, as well as significantly improving the supply chain. He has built strong relationships with key retailers in the market and held board positions on DrinkWise, Alcohol Beverages Australia and Australian Grape and Wine Inc (formerly the Australian Winemakers Federation).

“In his last position at TW he had accountability for the largest business in North America and led the global sales function. He has developed diverse teams and grown talent, including succession from within his team.”

6. METCASH EYES TWO LIQUOR ACQUISITIONS

Metcash completed a $330 million revenue raising in April to fund two liquor acquisitions, provide working capital and expand its MFuture growth program.

Total food sales for Metcash in the five months ended March rose 4.3%, while liquor sales were also strong, rising 3.2%.

Metcash revealed it was looking at three bolt-on acquisitions worth about $45 million, two in liquor and one in hardware. The liquor acquisitions are expected to close in the first half of the 2021 financial year.

7. DIAGEO LAUNCHES $1.2MILLION WELCOME BACK SUPPORT PACKAGE

Diageo announced in late May that it was launching a nationwide ‘Welcome Back’ support package for the on-premise, designed to help rebuild the Australian bar industry.

Valued at $1.2 million, the support package aimed to provide 130,000 free serves to venue partners across the country in bonus stock, and PR and marketing support to help enable bars to reopen and drive revenue in line with the current trading conditions.

The ‘Welcome Back’ package saw Diageo support venues across the country during their re-opening phase by offering $10 cocktails to help generate spirits revenue for partners as they welcomed back guests.

Chris Shaw, Diageo Australia Commercial Director, said: “This multifaceted support package will include trade deals, bonus stock that will equate to Diageo shouting them 130,000 standard drinks, and PR and marketing amplification for venues. This means a $1.2 million injection into our participating on-premise partners as they start to get back on their feet and welcome the return of patrons to their favourite venues.”

8. THE WINNERS AND LOSERS IN ALCOHOL \DURING COVID-19

A report from IRI revealed alcohol trends during COVID-19 and what it could mean for the future of the industry.

The data showed that consumer buying habits have changed dramatically since COVID-19 shutdown and may be “the new normal in a post COVID-19 world”.

While sales initially sales spiked in Australia for three weeks across all states, they subsequently dropped to just above pre-spike levels.

However, even during panic buying the week of the 22/03/20 – which saw 20-45% unit growth year on year – the spike was still 30-40% lower than the week leading up to Christmas.

According to IRI, consumers are becoming increasingly conscious of household budgets, with a shift to preferring Australians products, which may also be

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driven by price. Also, bulk purchase options have seen greater uptake, which could have implications for the future.

IRI said COVID-19 restrictions impacted the occasion mix, which will ultimately shift consumption choices moving forward.

“The premiusation trend may erode, with value offerings and bulk pack sizes to be favoured by consumers,” the report noted.

IRI suggested the potential winners include cask wine, while the potential losers include Champagne and craft beer.

All key liquor categories saw a reduction in dollars spent per litre during the high of panic buying.

Consumers were trading down to cheaper options, there was a spike in private label, a preference for known brands and a migration to larger pack sizes and larger pack multiples.

9. OFF-PREMISE SALES BOOM PREDICTED POST-COVID-19

Evans & Partners analyst Phil Kimber said in a report to clients that Australia’s food and liquor operators were benefiting from shoppers switching from eating out at restaurants and cafes to home dining.

“We expect grocery players will continue to benefit from the shift from out-of-home consumption to in-home consumption over the remainder of fiscal 2020 and well into fiscal 2021,’’ Kimber said.

“It’s difficult to accurately assess the benefit from this channel shift, however as detailed in this note, a 50% switch away from cafes/restaurants would add around 4 % to supermarket sales in fiscal 2021 and a 35% switch from on-premise liquor would add around 8% to liquor store sales.

“Both supermarkets and liquor are expected to be seen as an essential service thus the risks of enforced store shutdowns are low.”

Overall, CBA data showed that alcohol spending in Australia had fallen since the on-premise shutdown.

10. AUSSIES DRINKING LESS DURING COVID-19

Alcohol Beverages Australia revealed Australians were drinking less during COVID-19, with liquor sales falling 10-30% overall.

The ABA refuted an editorial by Dr Sarah Callinan and Dr Michael Livingston, senior researchers at La Trobe University’s Centre for Alcohol Policy Research (‘Will COVID-19 change our drinking habits long term?‘), that suggested that Australian were drinking more during the pandemic.

“A rise in people drinking to cope with all the stresses associated with the pandemic is a cause for concern,” the researchers said.

“Furthermore, home drinking is thought to be highly habitual; an increase in alcohol consumption at home during the pandemic might be difficult to reverse when the pandemic is over.”

ABA CEO Andrew Wilsmore said the claims by the Centre for Alcohol Policy Research couldn’t be further from the truth.

“As researchers in the alcohol field, they should have had more caution in equating an increase in packaged liquor or homedelivery sales to many Australians drinking to excess while at home during this crisis,” Wilsmore said.

“There has been a total decimation of ‘on-premise’ sales through pubs, bars, clubs and restaurants.

“Our beer, wine and spirits producing members are all telling us that this loss of sales has only marginally been made up for by an increase in packaged retail liquor sales.

“Indications are that overall sales and volume loss range from 10-30%, with many small producers even more severely impacted as they are unable to access the retail channel and/or have had to close their cellar/brewery/distillery door.”

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ABA CEO Andrew Wilsmore